Equifax reached a settlement agreement to resolve a nationwide lawsuit filed by the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), and 50 U.S. states and territories.
The complaint was related to the 2017 massive data breach that affected approximately 147 million consumers.
Details of the settlement agreement
Under the settlement agreement, Equifax will pay up to $700 million to resolve the lawsuit as part of the comprehensive settlement with the FTC, CFPB and 50 U.S. states and territories.
The settlement includes $425 million fund for consumers affected by the data breach, $175 million payment to 48 states, the District of Columbia and Puerto Rico, and $100 million in civil penalties to the CFPB.
The credit reporting company will initially provide $300 million to the fund to pay for credit and identity theft monitoring services for consumers. It will also be used to reimburse consumers’ out-pocket-expenses due to the data breach.
Equifax will add up to $125 million to the fund if the initial payment is no enough to compensate consumers for their losses.
The settlement also requires Equifax to provide all U.S. consumers with six free credit reports annually for seven years. That is in addition to the one free annual credit report that Equifax and the two other credit reporting agencies provides to consumers.
Equifax will “take steps to improve its data security”
In a statement, FTC Chairman Joe Simmons said, “Companies that profit from personal information have an extra responsibility to protect and secure that data. Equifax failed to take basic steps that may have prevented the breach… This settlement requires that the company take steps to improve its data security going forward, and will ensure that consumers harmed by this breach can receive help protecting themselves from identity theft and fraud.”
On the other hand, CFPB Director Kathleen said, “The incident at Equifax underscores the evolving cyber security threats confronting both private and government computer systems and actions they must take to shield the personal information of consumers. Too much is at stake for the financial security of the American people to make these protections anything less than a top priority.”
She encourages consumers affected by the data breach to submit a claim to receive free credit monitoring or cash reimbursements.
Consumers may visit https://www.equifaxbreachsettlement.com/to file a claim.